Rules are the protector for playing safe while trading your stocks.

When the logical explanation for any changes in the market is not relinquishing your thoughts then the only option you can choose to justify market behavior is the rules which guide you while trading. These rules are necessary, not only for proving the existence of cause and effect behavior in share market but also to make sure that playing safe is also a part of trading stocks. Rules may not allow a trader to make sudden unexpected trading activity but it also ensures the ability of trader to make safe investment. They are like safety valves. They are used when internal pressure is too much inside a container and before the container explodes, the pressure is balanced by these safety valves. Same thing happens in stocks market. The traders use rules they formulate to have a safe and secured environment for trading stocks.

Sometimes all the trader encounter a unique situation which provides opportunity for the trader. They can choose to think out of the box or to think in way that could make them safe. Choosing to follow rules is far more easy than to seek and try to find environment which is not explored by other people. When unexpected events occurs, the trader can use the experience acquired and make decision on the basis of that experience. This makes a trader vulnerable to any possible event in the national or international scenario. In situations like that rules are life savers. They provide a guide line for what to do and  what not to do.

Rules provide a base on which traders can actually make the decisions. If a traders makes decision about using rules then it consist of buying rule, selling rule and holding rule. A simple eight standard mathematics provides the idea of buying and selling. Share market is a business. It's financial business. The fundamentals of business remains same for it too. It's buying at low cost and selling at higher cost. Then a trader should always try to purchase all the stocks which are to be traded at low cost as possible. When purchasing price is reduced from the beginning then even slight increase in selling price will provide seller a little more profit than purchasing same product at high price.
Next: selling rule.  While selling a trader must make logical decision about the stock he or she sell. If the decision of selling is not made in right time when the price is appropriate, then it might increase the  opportunity cost and leave a minimum amount of profit instead of maximum. It provides traders a base to judge the moment to sell and place right selling amount.
Finally holding rule. If the return is not suitable at the moment then it's best to hold the stocks. Even though holding stocks can put a burden of stable asset to trader, it also ensures a suitable and expected return on investment. Holding for long time without proper reason of benefit is never useful and it should be avoid as far as possible.